View our guide on how to interpret the FX Dashboard
- Continuing yesterday’s trend, it was mostly a quiet session for FX in Asia due to lack of economic data and general news flow. Until Westpac forecast RBA to cut 2x and begin QE by June 2020. This follows on from Dr Lowe’s speech yesterday where he effectively ruled out negative rates, yet left room for further cuts and the potential for QE (but not until rates hit 0.25%).
- AUD was quick to react and shed 20 pips and is now the weakest major of the session, AUD/NZD touched a 3-month low AUD is the weakest major and USD is the strongest, volatility remain contained overall though with daily ranges around 20-50% of the ATR’s. AUD/USD is the biggest decliner, EUR/AUD is the leader of the back with NZD/JPY a close 2nd.
- Positive comments from Trump on trade saw NZD/JPY touch is highest level since August 2nd, yet the small range with 70.27 resistance nearby makes it vulnerable to a dip lower.
- Construction work done in Q3 beat expectations, by only contracting by -0.4% versus -1.0% expected. It’s a minor victory at best though, as the sector has contracted for the past 5 quarters.
- DXY: This week has provided a spinning top Doji and bearish inside day on the daily charts below 98.45 resistance, which feeds into the potential for mean reversion from current levels. Still, with it being a quiet week data-wise, it could simply consolidate around current levels without a catalyst and we’d revisit the potential for a bullish break.
- AUD/USD: The dovish forecasts from Westpac has seen sellers return so support around 0.6700 is back within focus. A clear downside break of this level brings 0.6750 and 0.6723 support into view for bears.
- USD/JPY: Yesterday’s candle is reminiscent of a bearish hammer, although the body is wider than textbooks would like. Yet with it closing beneath 109.76 resistance, there’s still potential for a swing high to form. It all comes down to a trade deal – if markets believe one will materialise, expect USD/JPY to head for 109.47, whereas if it appears dead in the water (again), then we’ll get the bearish catalyst.
- U.S. President Trump’s ‘final throes” remark on the completion of the U.S-China Phase One trade deal has muted effect on Asian stock markets even though U.S. major stock benchmark indices; S&P 500, Nasdaq 100 and Dow Jones Industrial have soared to hit another round of fresh all-time highs respectively.
- Mix performances so far for key Asian stock indices with China A50 down by -0.15% and Singapore’s Straits Times Index and Hong Kong’s Hang Seng Index are almost unchanged. The top performer is from Australia’ ASX 200 that has rallied by close to 1.00% reinforced by RBA governor Lowe’s speech yesterday that quantitative easing monetary policies can still be implemented by RBA if “certain conditions” warrant.
- The AXS 200 is now breaking above last week’s high of 6814, also a 3-month high led by the Telecommunications Services and Technology sectors that have gained by 2.53% and 1.16% respectively.
- Overall, Asian stock markets need more clarity on the U.S-China trade deal and what is in store for “Phase Two” rather than just “optimism talking”. Also, on the signing off on the Hong Kong Human Rights and Democracy Act into legislation where U.S. President Trump has been “sitting on it”. Beijing has continued voiced displeasure and vowed to retaliate, thus may complicate the on-going trade deal negotiation talks. If Trump opts to do nothing, the bill will automatically become law on 03 Dec. If Trump veto it, the bill can still be overridden by two-thirds majorities in the House and Senate where most Democrat and Republican law makers support the bill overwhelmingly.
- The S&P 500 E-Mini futures is trading almost unchanged in today’s Asian session with a tight range of 5 points.
Matt Simpson and Kelvin Wong both contributed to this articleData from Refinitiv. Index names may not reflect tradable instruments and not all markets are available in all regions.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.
Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.